The Economist Warns That Newspapers Putting Up Paywalls May Create Newspaper 'Pirates'

from the well,-duh dept

The Economist has become really sharp on the sorts of issues we talk about here these days lately. Just this year alone, it's published articles on how the patent system is broken and hindering innovation, and how copyright law is broken, and has little to do with its intended purpose. Recently, it also highlighted a study showing the problems with gene patents. Not bad. And, now, as a few of you have sent over, it's warning the newspaper industry that it would likely be a mistake to put up paywalls, because it will create a new breed of "newspaper pirates." Most of the article is about "TV piracy," which the magazine appears somewhat indifferent about -- noting that it's not really a big problem, since TV is designed to get people hooked on watching future episodes, so free and easily available shows probably isn't a huge deal.

However, the final paragraph notes a warning to newspaper paywalls (and to television folks who think that charging for shows online makes sense):

In this sense the pertinent parallel is not with music or films but with newspapers and magazines. These days print piracy is a trivial issue, since most general news articles are given away free. If newspapers and magazines begin charging people to read their output, the pirates are likely to turn up, and quickly.

Of course, it's not clear whoever wrote that piece talked about it with the management at The Economist, since last year they decided to bring back something of a paywall for its own content.

Sell the news. Let people make their own copies.

Journalists on the other hand think in terms of selling news and analysis, i.e. their intellectual work.

The market for copies has ended.

The market for intellectual work is as strong as ever.

Unfortunately, the journalist has to survive the revolution of a transition between the sale of monopoly protected copies and a free market in the sale of intellectual work.

Journalists meet your readers. You've got to make a bargain with them for the exchange of news and money, because copies cost nothing to make and the monopoly that pretends people can't make their own copies is well past its use-by date.

The newspaper can't pay journalists, because no-one's paying the newspaper for copies. That's why the journalist has to sell their news to the people who want to read it (not those who want to sell copies of it).

Re: Sell the news. Let people make their own copies.

I think newspapers serve two other important functions. They give people a convenient place to find news, and they filter the information deluge. I think the second is more important; good editors / journalists find good stories; good editors / journalists explain why a fact matters.

Unfortunately for print media, there is no reason these functions cannot be just as effective in cyberspace.
Fortunately for editors / journalists, there is no reason these functions cannot be just as effective in cyberspace.

Re: Re: Sell the news. Let people make their own copies.

Absolutely. There's a great future for those who select the news as well those who produce it. The important thing to recognise here, is that selection is also intellectual work, just as is collection and analysis.

So, the person who selects all Techdirt articles about the future of newspapers should be entitled to be paid for their work in selecting those articles - by their customers who pay them to make such a selection.

When you remove the anachronism of copyright it's much easier to see why money should be exchanged for work, not the reproduction or communication of it.

You pay the ISP for their work in providing bandwidth you need for communication.

You pay the printer for their work in manufacturing paper prints you find convenient.

You pay the news selector for their work in selecting the news that interests you.

You pay the journalist for their work in collecting and analysing the news.

That's what a free market looks like.

The crazy one we have at the moment says no-one can communicate or do anything with any information unless they engage in multilateral negotiations with umpteen respectively privileged parties.

Effectively it's polarising into two markets:

The white market that's stagnating, grinding to a halt under an incredibly complex yoke of 18th century constraints.

The black market where anything goes, but one where it's difficult for the right people to get paid by those who want to pay them.

Re: newspaper pirates

In the 20th century the cost of producing news was combined with the cost of its distribution/communication, and sold as one.

In the 21st century we pay for communication separately from production.

Thus you pay an ISP for bandwidth, and you pay Mike Masnick et al to produce TechDirt.

Anyone can communicate TechDirt. There is no monopoly over broadcast or production of copies.

However, only Mike Masnick can produce his commentary and analyses (possibly there are others who can produce intellectual work of comparable quality).

I suggest that in the 21st century, those who want to receive Mike's work will pay him to produce it.

Those who want to make copies of it, or to share it with their friends, will do so freely and for nothing.

One day people will recognise the difference between intellectual work and copies of it and I won't have to keep explaining it - that although a silicon chip can do one, it takes an incisive and intelligent expert to do the other.

Re: Re: newspaper pirates

Re: Re: newspaper pirates

Great distinction: "In the 21st century we pay for communication separately from production." As you have pointed out the market for copies has ended, but the market for the production of content still exists.

Re: Re: Re: newspaper pirates

Note though, that 'content' is a newspaper magnate's term for the stuff they fill their containers with.

Newspapers have been in the business of shipping intellectual work from the producers (journalists who they pay as little as possible), mass producing containers/copies of it at incredibly low cost, and then selling those containers at monopoly protected prices. They make their money not from the intellectual work, but from the profits their monopoly gives them in the sale of copies. If the work costs $10,000 and they sell a million copies for a dollar each that cost a cent to print, then it's not the work the price of a copy really pays for. The newspaper enjoys a monopoly in the distribution of that work to the reader.

When readers have their own distribution network (they pay ISPs for it) and their own production facilities (PCs), then the only party that needs paying are the intellectual workers - and they may as well expect to get paid the usual rate. A blogger can get paid a penny per article by each of their subscribers keen for it to be written. If the web is treated as a massive newspaper with billions of readers, a good blogger might attract a thousand of them interested enough to commission more, that's $10 per blog item.

What disappears are the box-shifters, the sellers of containers filled with content, copies of intellectual work.

In this way we can recognise that 'content' is a disrespectful term from the perspective of both the writer and the reader. 'Content' is an important term only from the perspective of the manufacturer, distributor, and retailer of copies.

You mean that artificially restricting access to something creates demand for a black market? The Economist seems to be in charge of the market for stating the bleeding obvious, at least.

I wonder if they are going to let the movie and music industries know this as well so they can have a chance to stop acting like morons... As for the rest of the article:

"Aware of the limitations of advertising-supported online video, European media firms are currently testing micropayments for shows. The wide availability of free illegal alternatives may well crimp these efforts."

Erm, limitations? They mean like the way that every country blocks outsiders from viewing their content, meaning that the viewer is left with no chose other than to "pirate" if said content in unavailable on their local service (if they even have one)? Like the way that services are often not allowed to show half their programming online (e.g. the BBC's iPlayer is not allowed to show Family Guy or a majority of movies they have shown). The way that only one or 2 episodes are usually made available, making those services useless if you're coming to a show late? Or how about the fact that most shows on iTunes are horrendously overpriced and also region controlled?

I fail to see how micropayments are going to make any difference, when they can't even get the more attractive free version right. Yes, I know it's all about licensing, but they really should be getting those sorted out rather than trying to add further barriers.

Grey Lady Down

Much as I love the Economist, it feels like they've got the Wall Street Journal attitude. "We're so important, people will pay to read us online." If any media outlets could make that claim, The Economist, NYT, and WSJ could. But I don't think anyone can. People who already read them appreciate the archive / access, but others don't know what they are missing, or get their information from another source. Moreover, all the potential readers coming from external links are lost once the paywall kicks in.

in other news

We have to restrict the use of hammers now cause they might create BUILDING PIRATES

Ya know those dastardly people called "DO IT YOURSELFERS"

we must destroy this and stop this insane evil practice before it catches on and people actually SAVE MONEY.

WE need dark helmet to republish how home building is destroying the restaurant business and link home building to destruction to restaurants and add this to RETARD the organization built on lies , greed and cheating you of all your money regardless of how you vote corrupt politicians we purchase er bribe er lobby will do what WE SAY.

-From the guy two posters yesterday made TAM LOOK like a genius , i say to you YOU SIRS SHOULD RUN R.E.T.A.R.D.
YOUR PERFECT

P.S.

there are already pdfs of scientific journals , computer mags and other knowledge

NEWS being rarely kept as KNOWLEDGE will not be pirated like they think, rather it will be reported to buddies and they will spread the word, in effect the news agencies put up the pay wall are only discluding themselves from new readership and the advertising monies they could garnish

-CRHONOSS
United Hackers Association
WOOT we R has a 100megabit web server , guess what ill begin a news website for all categories and KEEP it free and give techdirt a nice link in the tech area, with OUR own blog,
add my own spider web search engine and guess what?
I dont even care if one day you wall Google in then do i?

If people want the news that badly, it's a great thing

If newspapers and magazines begin charging people to read their output, the pirates are likely to turn up, and quickly.

This is really all the article said about newspapers.

My feeling is that if putting up paywalls encourages newspaper piracy then that might be a great thing for the news business because it might encourage demand where there currently is none. If people want to read a newspaper's content enough to steal it, given the abundance of free news already available, then that means the stolen news actually is considered worth the trouble.

Stop and think about the news sources you currently read for free. How many of them are so essential to you that if you can no longer get them for free, you'll look for ways to pirate them. Anyone want to toss out some sites?

Actually, what is more likely to happen, and already does happen, is that if something important comes out behind a paywall, someone who subscribes will paraphrase and summarize and the story will get out. A lot of people really only want the short version anyway.

In contrast, doing a condensed version of a film, TV show, or song doesn't work nearly as well which is why people are more inclined to get hold of the unedited version.

Re: If people want the news that badly, it's a great thing

Suzanne, TechDirt does not have a paywall and yet it already enjoys piracy. That indicates the articles are interesting (attract eyeballs to exploit via advertising).

However, I'm intrigued by your notion that reducing supply increases demand. If a public water fountain in Paris on a hot day is closed off to the public and an admission fee is charged does this increase demand for water? Vendors of bottled water may SEE an increase in demand for their wares, but that isn't actually an increase in overall demand - just a reduction in supply. What creates an increase in demand is the hot day.

In any case, news is not quite like water. Being reproducible without significant cost it is the human labour (the collection/production of news) that is the precious resource, and once published it becomes a perpetual public good diffused by word of mouth or Internet. One can no longer make the published news precious by prohibiting people from reproducing or distributing it.

I thought that was what has been said here and elsewhere. That reducing supply of a popular item increases demand as is reflected by an increase in price. Isn't that the basic concept of high priced, limited editions? Make fewer of them and charge more for them?

Re: Re: Re: Re: If people want the news that badly, it's a great thing

Reducing supply does not logically increase demand, though it may well increase price.

That was, more or less, my point. The Economist said that putting news behind a paywall would increase piracy. I said that I didn't think that many people wanted those newspapers enough to pirate them. Those who really want the newspaper are the ones willing to subscribe. The ones who aren't willing to pay are likely to be more marginal and aren't earning the paper any money anyway.

What newspapers using a paywall have decided that they want more of a subscription model and whatever views they lose isn't of major monetary consequence to them.

There's also the concept that a paid customer is worth more to advertisers than a free customer because they are of a higher quality.

At any rate, there is already so much free news around that most people grab the headlines from a few sources and that satisfies them. Most people were content to watch 1/2 hour of local news on TV, 1/2 of national news on TV, and to read the local paper. Then maybe they also watched CNN or now Fox or MSNBC. And maybe they also turned into talk radio during their commutes.

The newspapers going for a paywall probably aren't tapping into that audience anyway. They are saying, "We've got a niche audience that already pays, so that's who we'll continue to target."

What I was saying was that if people actually pirate paywall newspapers, that would indicate there's more interest in them than I would assume there is. They specifically want these newspapers rather than what they can get for free.

Re: Re: Re: Re: Re: If people want the news that badly, it's a great thing

It might be worth asking yourself which news production team you'd be more inclined to sponsor:
1) One with news articles that one couldn't share or link to (except with other sponsors).
2) One with news articles that one could share and link to.

I don't know about most people, but I have little time or use for news I cannot share, and extreme antipathy for news that, if unwittingly shared, could make me liable for million dollar fines and possible imprisonment.

That leads me to suspect that all this talk of paywalls is simply a gambit preceding the imminent taxation of the Internet. News publishers have to price their news (even if they allow 99% of people free trial subscriptions that keep on getting extended) in order to claim a goodly chunk of the tax.

Re: Re: Re: Re: Re: Re: If people want the news that badly, it's a great thing

It might be worth asking yourself which news production team you'd be more inclined to sponsor:
1) One with news articles that one couldn't share or link to (except with other sponsors).
2) One with news articles that one could share and link to.

All things being equal, I would be more likely to sponsor the site that allowed linking. But because content differs from site to site, whether or not they are linkable has not been a deciding factor for me.

I've been a subscriber of the Wall Street Journal, the New York Times, and the Economist (gift subscription in that case). I've also subscribed to a number of other publications.

I'm really most concerned about what is of interest to me rather than if I can link. For example, I subscribed to Pollstar when I could get the online-only version for $200 a year. Then when I didn't need it so much, I stopped subscribing. Then I wanted to start getting it again, but they were no longer offering the online-only version. These days you subscribe to the print version and that includes the online version. That's about $500 a year, and a bit more than I want to pay.

Right now I don't need the Wall Street Journal on a daily basis so I don't subscribe. Since some articles are behind a paywall, I don't try to link to those, but the blog posts are all available to the public, so I retweet some of those on Twitter.

When the NY Times goes behind a paywall, I'll have to wait and see. A limited number of articles every month are going to be available to the public and that might be sufficient for my needs. That's what they have said: that people who link through Google aren't likely to see a change.

Ultimately, which newsources I subscribe to depends on which ones I need for professional reasons. If they charge, but that information enables me to make money myself, I will pay.

Another example

Going Digital, Staying True | The Nation: "Like other similar magazines, some of our premium content is behind a paywall, but at this point we are not increasing the volume of paid content. Our focus right now is on developing special online benefits to spur subscriptions and add features that make using TheNation.com a richer experience. Our form of journalism requires real financial support, but it's our belief that if we continue to produce high-quality journalism while facilitating a vibrant community online, you will continue to support us -- as you have for 145 years -- as subscribers, as Nation Associates or as one of the thousands who email, tweet, recommend and share our articles every day."